Is it crazy for me to anticipate living on a budget like this when I graduate? Is it even possible?

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itstoomuch
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Re: Is it crazy for me to anticipate living on a budget like this when I graduate? Is it even possible?

Post by itstoomuch »

Junior or senior or other college level?
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo
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btks
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Re: Is it crazy for me to anticipate living on a budget like this when I graduate? Is it even possible?

Post by btks »

itstoomuch wrote:Junior or senior or other college level?
Sophomore, but enough credits to be a Junior
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Re: Is it crazy for me to anticipate living on a budget like this when I graduate? Is it even possible?

Post by LadyGeek »

I removed some comments which may be misinterpreted on aspects of the OP's lifestyle.

I believe everyone has good intentions, but it's very difficult to state your points clearly in an anonymous internet setting.
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Re: Is it crazy for me to anticipate living on a budget like this when I graduate? Is it even possible?

Post by LadyGeek »

btks wrote:As of this evening, I have resigned from my job to a) focus on school and (hopefully) continue to get As and b) I need time for myself. Let's hope that things go smoothly from here on out. I am hoping that my decision to not work now will bring greater rewards in the future i.e. when I graduate, as I will dedicate more time to my studies.
As stated Re: At what point do you tell your biggest client that no, it's not free this time?, take your time and do some planning

If you need a student loan and don't know how to proceed- we've got a ton of experts who can help you with that (search this forum).
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lee1026
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Re: Is it crazy for me to anticipate living on a budget like this when I graduate? Is it even possible?

Post by lee1026 »

Lots of people are saying that salary estimates are I don't think software engineers are making 105k just out of college. Salary.com shows the average salary at 100k, which would mean that fresh out of college would be less and with experience they would be more. I'm in a different type of engineering so perhaps not as familiar as others though.
When I was a new grad a long time ago, I made somewhere on the order of 135K after accounting for stock grants and bonuses, so I don't think 105K is particularly unreasonable.
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btks
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Re: Is it crazy for me to anticipate living on a budget like this when I graduate? Is it even possible?

Post by btks »

lee1026 wrote:
Lots of people are saying that salary estimates are I don't think software engineers are making 105k just out of college. Salary.com shows the average salary at 100k, which would mean that fresh out of college would be less and with experience they would be more. I'm in a different type of engineering so perhaps not as familiar as others though.
When I was a new grad a long time ago, I made somewhere on the order of 135K after accounting for stock grants and bonuses, so I don't think 105K is particularly unreasonable.
And, I'll be graduating with a fairly high GPA... I would say at least a 3.9. I have a 4.0 currently, but as things get harder, that may change if I get a few Bs. I want to aim for an internship at one of the big tech companies, too. That would be fun.
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Re: Is it crazy for me to anticipate living on a budget like this when I graduate? Is it even possible?

Post by randomguy »

btks wrote:
lee1026 wrote:
Lots of people are saying that salary estimates are I don't think software engineers are making 105k just out of college. Salary.com shows the average salary at 100k, which would mean that fresh out of college would be less and with experience they would be more. I'm in a different type of engineering so perhaps not as familiar as others though.
When I was a new grad a long time ago, I made somewhere on the order of 135K after accounting for stock grants and bonuses, so I don't think 105K is particularly unreasonable.
And, I'll be graduating with a fairly high GPA... I would say at least a 3.9. I have a 4.0 currently, but as things get harder, that may change if I get a few Bs. I want to aim for an internship at one of the big tech companies, too. That would be fun.
Grades don't really matter. I have interview 100+ college kids and had discussions about who to hire. Not a single time did grades every come up. You might get culled out ahead of time if you are blind mailing companies but at job fairs and the like we tended to give like 5-10 min mini interviews to anyone one who wanted one (i.e. there was always one or two open slots). You either impressed or you didn't.

Salary is very region dependent. 105k in the silicon valley seems reasonable (haven't hired anyone in years but we were doing 85k (+ signing bonus and options/RSUs of course) 5+ years ago and things have only gone up ). In other places you might be 20-30k less. And there are company gaps. Some companies are willing to pay more for good coders. Others don't.
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btks
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Re: Is it crazy for me to anticipate living on a budget like this when I graduate? Is it even possible?

Post by btks »

randomguy wrote:
btks wrote:
lee1026 wrote:
Lots of people are saying that salary estimates are I don't think software engineers are making 105k just out of college. Salary.com shows the average salary at 100k, which would mean that fresh out of college would be less and with experience they would be more. I'm in a different type of engineering so perhaps not as familiar as others though.
When I was a new grad a long time ago, I made somewhere on the order of 135K after accounting for stock grants and bonuses, so I don't think 105K is particularly unreasonable.
And, I'll be graduating with a fairly high GPA... I would say at least a 3.9. I have a 4.0 currently, but as things get harder, that may change if I get a few Bs. I want to aim for an internship at one of the big tech companies, too. That would be fun.
Grades don't really matter. I have interview 100+ college kids and had discussions about who to hire. Not a single time did grades every come up. You might get culled out ahead of time if you are blind mailing companies but at job fairs and the like we tended to give like 5-10 min mini interviews to anyone one who wanted one (i.e. there was always one or two open slots). You either impressed or you didn't.

Salary is very region dependent. 105k in the silicon valley seems reasonable (haven't hired anyone in years but we were doing 85k (+ signing bonus and options/RSUs of course) 5+ years ago and things have only gone up ). In other places you might be 20-30k less. And there are company gaps. Some companies are willing to pay more for good coders. Others don't.
Well, that's good to know! I love programming... I began learning at such a young age, so I'm definitely not in this for the money, nor did I choose this major because it has better opportunities (i.e. higher employment). Ultimately, I grew up around computers and became fond of them early on, began a cheats website for a game, made some money, and learned a lot along the way. That's why I'm at where I am today and though some members of my family claim that I let the best years of my life (i.e. my teen years) rot away, I feel indifferent. I gained valuable experience early on, learned a lot about web development, learned how to setup and run my own linux machine to host my website (and even a website that saw at most 1000 users online), dabbled with sockets and networking, and so much more.
hnzw rui
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Re: Is it crazy for me to anticipate living on a budget like this when I graduate? Is it even possible?

Post by hnzw rui »

btks wrote:I thought about this some more... wouldn't you be in a higher tax bracket and thus, pay more taxes on the money you withdraw from the 401k once you reach retirement age? [if you are maxing out your 401k] Of course, past age (70?) you are forced to withdraw a % of your balance. Let's say your account balance is $4,000,000 at age 70, wouldn't you have to withdraw at least $150,000 or more to satisfy the IRS? If you were at a $75,000 salary all of your life, and began withdrawing $150,000 plus SS, then you'd be at a slightly higher tax bracket. Perhaps it may be better to contribute to a Roth 401(k) if available.
There's a limit to how much you can contribute to a 401k annually. You'd need to have pretty good returns to have $4M inflation-adjusted given the contribution limits. Besides, are you sure you can and would want to work until you're 70? Maxing out the 401k gives you more options. Once you reach critical mass on your tax deferred balance, you can always switch to Roth. Or you could just mix and match between tax deferred and Roth right from the start.

Now if that $150K/4M are just nominal amounts, there's a good chance that after 40+ years of inflation, $150K would just be in the 15% bracket. Right now, with standard deduction and exemptions, upper limit for the 25% bracket is already at $101,500.
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Re: Is it crazy for me to anticipate living on a budget like this when I graduate? Is it even possible?

Post by randomguy »

hnzw rui wrote:
btks wrote:I thought about this some more... wouldn't you be in a higher tax bracket and thus, pay more taxes on the money you withdraw from the 401k once you reach retirement age? [if you are maxing out your 401k] Of course, past age (70?) you are forced to withdraw a % of your balance. Let's say your account balance is $4,000,000 at age 70, wouldn't you have to withdraw at least $150,000 or more to satisfy the IRS? If you were at a $75,000 salary all of your life, and began withdrawing $150,000 plus SS, then you'd be at a slightly higher tax bracket. Perhaps it may be better to contribute to a Roth 401(k) if available.
There's a limit to how much you can contribute to a 401k annually. You'd need to have pretty good returns to have $4M inflation-adjusted given the contribution limits. Besides, are you sure you can and would want to work until you're 70? Maxing out the 401k gives you more options. Once you reach critical mass on your tax deferred balance, you can always switch to Roth. Or you could just mix and match between tax deferred and Roth right from the start.

Now if that $150K/4M are just nominal amounts, there's a good chance that after 40+ years of inflation, $150K would just be in the 15% bracket. Right now, with standard deduction and exemptions, upper limit for the 25% bracket is already at $101,500.
Something like 21k/yr (assume a company match) earning 5% for 45 years gets you 3.7 million. A slightly higher return (6-7% is optimistic not insane for an aggressive portfolio. ) could easily get you over the 4 million mark. Realistically the odds of someone working as a computer programmer (or just about any job) for 45 years straight is about zero. Between layoffs, burnout, health issues, age discrimination (in all fields not just tech. Finding a job after 55 is hard. You basically get stuck hoping your existing one doesn't go away) and so on, work histories like that are the exception not the rule.

I am amazed at the imaginary problems that people come up with. If you happen to retire and are getting 3x+ as much money as you did when you were working (remember no payroll taxes or savings needed when you are retired), you will deal with the taxes. The much scarier situation is retiring and getting half of what you hoped for. Are you willing to increase the risk of not having enough (by over paying taxes early in life) in order to reduce the risk of maybe paying more later?

At some point you reach a level of overplanning. The noise when you are looking 40 years in the future is too much to worry about details like ROTH versus IRA. Between tax law changes, income changes, returns, working history, and so on, nobody is going to be able to tell you what the right course is. Odds are both will be with in ~10%. Save 15-30% of your income and do check ups every 10 years to see how you are doing. And spend the rest of your life doing something productive.
itstoomuch
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Re: Is it crazy for me to anticipate living on a budget like this when I graduate? Is it even possible?

Post by itstoomuch »

btks wrote:
I thought about this some more... wouldn't you be in a higher tax bracket and thus, pay more taxes on the money you withdraw from the 401k once you reach retirement age? [if you are maxing out your 401k] Of course, past age (70?) you are forced to withdraw a % of your balance. Let's say your account balance is $4,000,000 at age 70, wouldn't you have to withdraw at least $150,000 or more to satisfy the IRS? If you were at a $75,000 salary all of your life, and began withdrawing $150,000 plus SS, then you'd be at a slightly higher tax bracket. Perhaps it may be better to contribute to a Roth 401(k) if available.
It is a possibility.
We went from a effective tax rate of $0 in 2014 to a marginal bracket of 15% in 2015 plus SS tax. For 2016 we will have unavoidable 25% marginal, 85% SS tax. [received an inheritance in 2015 and bought income property from the proceeds]

Our son knows his marginal tax rate may not decrease in his retirement because he will inherit some of our remainder deferred retirement funds and property.

You have a long ways to go to really worry about this. YMMV
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo
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